PPL Raising Capital (PPL)

PPL Corporation (NYSE: PPL) is planning to raise capital via a share sale via a registered underwritten public offering of 9,900,000 shares of common stock.  PPL noted that it plans to use the net proceeds to make capital contributions to its subsidiaries, to repay short-term debt obligations, and for other general corporate purposes.  The proceeds would be nearly $275 million based upon Monday’s closing price and the market capitalization rate is $16 billion.

What is interesting at PPL is that its 5.2% dividend yield puts it above the average dividend yield and the $27.66 closing price on Monday compares to a 52-week trading range of $25.00 to $30.27.

Morgan Stanley and BofA Merrill Lynch are acting as joint book-running managers for the offering.  The underwriters will be granted an option to purchase up to an additional 1,485,000 shares of common stock as a greenshoe option to cover any over-allotments.

Considering the size differential of the company’s market capitalization rate versus the small size of the offering, we would not look for much impact in the shares.

JON C. OGG